New London Hospital Association in New Hampshire has agreed to settle allegations it held onto Medicare and Medicaid overpayments for too long, according to the HHS Office of Inspector General (OIG). This is one of the few times OIG has settled a case under the Civil Monetary Penalties (CMP) Law applicable to known retention of an overpayment, although the Department of Justice has resolved false claims cases based on alleged violations of the 60-day overpayment refund rule.
New London Hospital Association, which includes New London Hospital (a critical access hospital), the Newport Health Center, and the New London Hospital Practices/New London Medical Group, agreed to pay $10,000 in the settlement agreement, which was obtained through the Freedom of Information Act. The settlement stemmed from a self-disclosure. According to its website, New London Hospital is part of Dartmouth-Hitchcock, a large health system in New Hampshire.
OIG contends in the settlement that New London Hospital Association “knew of certain overpayments and did not report and return those overpayments in accordance with” 42 U.S.C. § 1320a-7k(d). Specifically, OIG alleged that from March 23, 2010, through Oct. 30, 2020, New London permitted the accrual of overpayments owed to Medicare and New Hampshire Medicaid and, “when Respondent became aware of the overpayments, it failed to timely return the overpayments to Medicare and New Hampshire Medicaid.” New London Hospital Association was accepted into the Self-Disclosure Protocol (SDP) in November 2020.
“OIG’s message is they are enforcing the 60-day rule and maybe trying to send a message the Self-Disclosure Protocol is available for small-time problems,” said an attorney, who preferred not to be identified. Providers are required to report and return overpayments within 60 days of identifying them.
As part of the incentive to self-disclose actual or potential violations, according to OIG guidance, providers usually pay 1.5 times the calculated damages. In this settlement, New London Hospital Association paid about 2.2 times (restitution was $4,251). The reasons are unclear.
“For this amount of money, I would probably have sent it back to the Medicare administrative contractor,” the attorney said. Then again, the upside of the SDP process “is you can at least reduce your risk of being alleged to have submitted a false claim,” and failure to comply with the 60-day rule puts providers in the False Claims Act’s line of fire. Also, with the SDP, “OIG is committed to not imposing a corporate integrity agreement absent egregious circumstances,” the attorney said.
The hospital’s attorney did not respond to a request for comment by press time. New London Hospital Association didn’t admit liability in the settlement.
DOJ Settled Recent Case on Retained Overpayments
Almost four years ago, OIG settled another CMP case over retention of overpayments. Southern Cancer Center in Alabama agreed to pay $538,545 for allegedly keeping money owed to Medicare and Medicaid too long after realizing it was due, according to the settlement.[1] OIG alleged that Southern Cancer Center allowed the accrual of overpayments from March 21, 2007, to Feb. 1, 2017, and failed to timely return them after they came to light. Southern Cancer Center came forward on its own and was accepted into the OIG SDP in November 2017.
The Department of Justice has also settled several cases stemming from noncompliance with the 60-day rule. For example, SpectraCare Health Systems Inc. agreed to pay $1 million to settle false claims allegations that it improperly billed Alabama Medicaid for Basic Living Skills services and failed to return overpayments, which constitute reverse false claims under the False Claims Act, the U.S. Attorney’s Office for the Middle District of Alabama said July 23, 2021.[2] A whistleblower set the case in motion.
The attorney said it’s interesting the New London settlement refers to overpayments dating back to 2010 because the CMS regulation implementing the 60-day rule, which came to life in the 2010 Affordable Care Act, has a six-year look-back period. “Presumably the ‘failure to report and return’ was within the six-year look-back period for CMPs and for the 60-day refund rule.”
TRICARE also has adopted a civil monetary penalty for failure to return overpayments in 60 days.
